Correlation Between East Money and Lutian Machinery
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By analyzing existing cross correlation between East Money Information and Lutian Machinery Co, you can compare the effects of market volatilities on East Money and Lutian Machinery and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in East Money with a short position of Lutian Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Money and Lutian Machinery.
Diversification Opportunities for East Money and Lutian Machinery
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between East and Lutian is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding East Money Information and Lutian Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lutian Machinery and East Money is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on East Money Information are associated (or correlated) with Lutian Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lutian Machinery has no effect on the direction of East Money i.e., East Money and Lutian Machinery go up and down completely randomly.
Pair Corralation between East Money and Lutian Machinery
Assuming the 90 days trading horizon East Money Information is expected to generate 1.58 times more return on investment than Lutian Machinery. However, East Money is 1.58 times more volatile than Lutian Machinery Co. It trades about 0.09 of its potential returns per unit of risk. Lutian Machinery Co is currently generating about 0.01 per unit of risk. If you would invest 1,399 in East Money Information on August 25, 2024 and sell it today you would earn a total of 1,191 from holding East Money Information or generate 85.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
East Money Information vs. Lutian Machinery Co
Performance |
Timeline |
East Money Information |
Lutian Machinery |
East Money and Lutian Machinery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with East Money and Lutian Machinery
The main advantage of trading using opposite East Money and Lutian Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Money position performs unexpectedly, Lutian Machinery can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lutian Machinery will offset losses from the drop in Lutian Machinery's long position.East Money vs. Lutian Machinery Co | East Money vs. China Longyuan Power | East Money vs. Changshu Tongrun Auto | East Money vs. PetroChina Co Ltd |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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